IBBI sets one-year timeline for liquidation process of insolvent companies

The Insolvency and Bankruptcy Board of India (IBBI) has changed the process of liquidation to make it time-bound. The new rules say that the process must be finished within one year of its commencment.

The new regulations also say that a compromise between the stakeholders must happen within 90 days of the liquidation order.

The amendment requires the financial creditors to contribute towards the liquidation costs, when the company does not have resources. This can be recovered with interest later. 

When a company is up for liquidation, the rules mandate that every part of the company— employees, financial creditors, etc.— must form a